Constants

The standard log2 number of iterations for password stretching. This should
increase by 1 every Drupal version in order to counteract increases in the
speed and power of computers available to crack the hashes.

I would not recommend you to use md5. It has been weakened a lot last years and with Graphics cards (GPU) helping with cracking those passwords are not safe. One of Microsoft Update last hacker problems was because of certificate signed with md5 was hacked.